If I start the VM and move the VM window to the secondary monitor then enter seamless mode, the VM window disappears and no client windows are displayed. Pressing <Ctrl><Home> will allow me to disable seamless mode and restore the VM window to its original state.

If I move the VM back to the primary display and enter seamless mode, then everything works fine.

I can confirm this issue with virtualbox-1.6.4 nvidia binary drivers 173.14.09 and xorg-server-1.4.2. The guest is Windows XP Pro SP3. This makes seamless mode a bit useless to me, since I use it to put Windows apps on my second display (currently using vmware-server and a seamless rdp hack).

I have the same symptoms, but a different configuration. My host OS is Windows XP SP3, guest is Ubuntu 8.04, VirtualBox 2.0.0 (PUEL.) Not opening another ticket on the suspicion it's all the same underlying problem.

Works for me in 4.0.0, after creating two virtual monitors, assigning one virtual monitor to each real monitor, entering seamless mode, and configuring monitors in guest. There is a visual glitch when guest windows are deleted on the secondary monitor, the guest background shows until the next time a guest window is moved/created on the secondary monitor (this was reported in the beta forums, don't see a separate ticket on it.)